Romania

Private and Public Health Services

A FRD Center analysis

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Introduction

This presentation is produced by FRD Center – www.frdcenter.ro - one of the pioneer

privately owned independent market entry consulting and M&A advisory firms in Romania.

Since 2000, FRD Center offers tailor-made market research and intelligence, B2B

matchmaking and M&A consulting services to foreign organisations interested to enter

Romania and the emerging markets in Europe as exporters, consultants, investors or joint-

ventures, to relocate their operations, or to source in CE, SE and Eastern Europe.

Disclaimer:

Whilst every care is taken in compiling this report, no responsibility is taken for errors or

omissions. FRD Center guarantees that this information, collected and generated, has been

operated in a professional manner and best efforts were applied with a view to offering

accurate and complete results. However, FRD Center will not be held liable for any damage or

loss resulting from the use of the information contained herein.

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As part of the CSR activity, FRD Center endorses the

Sibiu International Theatre Festival SibFest FITS - www.sibfest.ro

The Sibiu International Theatre Festival is the most complex festival in Romania.

Internationally, it has become the most important performing arts festival in Europe,

judging by its ampleness, dimension, and quality of events, before Edinburgh

International Festival (Great Britain) and Avignon Festival (France)

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Why Romania?

Romania is the most dynamic large market in Europe, a strong democracy, a NATO and EU

member. After a GDP growth of 4.8% in 2016, in Q1 2017 Romania registered the highest

GDP rate in the EU: 5.6%.

With unemployment average of 5.5%, the purchasing power of the Romanian population

increased with 12% in 2016 and the consumption with 9%.

Additional to the local consumption growth and increasing purchasing

power, Romania's strategic advantage is its position as a GATEWAY

to the EU, on one hand, and to large markets such as Russia, Turkey,

Ukraine, Kazakhstan that are not part of the EU.

Romania presents interest to foreign investors or manufacturers

looking to acquire a local player and set up operations in the country,

thus accessing the EU market (510 million people) and relevant

markets in Eastern Europe.

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Healthcare system in Romania

The Public Health expenditure in Romania represents approx. 80% of the total health

expenditure.

Health expenditure, total (% of GDP) in Romania was reported at 5.565 % in 2014,

according to the World Bank collection of development indicators, compiled from

officially recognized sources.

Some 5 million Romanians choose the Private Medical services, rather than the Public

Healthcare.

The Romanian Private Medical infrastructure covers 75% of all medical units in Romania,

with an average annual growth rate of 300% in the last 15 years.

The Romanian Public Health system is organized at two main levels, national and

district, mirroring the administrative division of the country.

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Hospitals in Romania

According to the National Institute of Statistics, there were 554 hospitals in Romania

in 2015, out of which 367 public hospitals (66%) and 187 private hospitals (34%).

According to a FRD Center analysis, the number of the private hospitals in Romania

has increased by 16% in 2015 compared to 2014.

Hospitals in Romania in 2015, by type of ownership

66%

34%

Public hospitals Private hospitals

Source: FRD Center, National Institute of Statistics

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Medical Centres in Romania

According to the National Institute of Statistics, there have been 626 speciality

medical centres in Romania in 2015, out of which 36 public centres (6%) and 590

private centres (94%). According to a FRD Center analysis, the number of the private

speciality medical centres in Romania has increased by 116% in 2015 compared to

the previous year.Speciality medical centres in Romania in 2015, by type of ownership

6%

94%

Public speciality medical centres Private speciality medical centres

Source: FRD Center, National Institute of Statistics

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Medical Units in Romania

590273214- private

363635- public

626309249Speciality medical centres, out of which:

187161134- private

367366365- public

554527499Hospitals, out of which:

201520142013No of medical units in Romania

Source: FRD Center, National Institute of Statistics

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Development of the Medical Units in Romania

No of hospitals and speciality medical centres in Romania, 2013 - 2015

0

200

400

600

800

2013 2014 2015

Hospitals Public hospitals Private hospitals

Speciality medical centres Public speciality medical centres Private speciality medical centres

Source: FRD Center, National Institute of Statistics

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Private Healthcare in Romania

Main private providers of healthcare services in Romania

are:

- MedLife

- Regina Maria

- Sanador

- Synevo

- Gral Medical

- Hiperdia

- Polisano

- Medicover

- Sante

- Monza

- Med-As

- Arcadia

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Largest Private Hospitals in Romania

Arad (Western Romania)114Centrul Medical Laser System

Salaj (NW Romania)120Fundatia Acasa

Bihor (NW Romania)126Pelican Impex

Bucharest129Delta Heath Care

Bucharest131Regina Maria / Centrul Medical Unirea

Bucharest134Centrul Medical Policlinico di Monza

Constanta (SE Romania)137Asclepios

Iasi (NE Romania)145Arcadia Hospitals

Iasi (NE Romania)146Elytes Hospital Hope

Arad (Western Romania)155Terapeutica

Mures (Centre Romania)159Nova Vital Hospitals

Bacau (NE Romania)165Polimed

Cluj (NW Romania)180Polaris Medical

Iasi (NE Romania)225Red Hospital Sf Sava

Bucharest365Sanador

LocationNo of beds in

2015

Private Hospital

Source: ZF, Ministry of Health, FRD Center

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MedLife

MedLife is the leader of the private healthcare services

market in Romania. MedLife has accelerated its expansion

in the last two years by opening new clinics and by buying

smaller competitors, such as Anima Clinics in Bucharest,

Almina Trading operating in Ilfov and Dambovita, Genesys

Medical Clinic Group in Arad and Stem Cells Bank in

Timisoara.

Medlife has recorded a turnover of EUR 112m in 2016, up

by 29% compared to 2015. In the first quarter of 2017,

MedLife has registered a net profit of almost EUR 1m, up

15.5% y-o-y.

MedLife is controlled by the Marcu family and its shares

are listed on the Bucharest Stock Exchange.

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Regina Maria

Regina Maria (Centrul Medical Unirea) is the second

largest private healthcare operator in Romania. Regina

Maria has acquired in the last two years Al-Medica Berlin

Medical Center in Ploiesti, the Clinic IXIA Medica in

Bucharest, the Ponderas Academic Hospital in Bucharest,

the Helios Medical Center in Craiova and the Dr. Grigoras

Medical Centers in Timisoara.

Regina Maria has recorded a turnover of EUR 91m in

2016, up by almost 40% compared to 2015. The company

expects a 30% turnover increase in 2017 and the growth

will be achieved organically, but also through acquisitions.

The European Investment Bank (EIB) has agreed in June

2017 to lend EUR 15m to support Regina Maria to upgrade

and expand its network of outpatient and inpatient

facilities mainly outside Bucharest. Regina Maria is

controlled by private equity fund Mid Europa Partners.

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Sanador

Sanador has the biggest private hospital in Romania. It is a

general hospital launched in 2011 in Bucharest, following

an investment of EUR 40m. Sanador has relied on organic

development and focused its investments only in

Bucharest by opening a hospital and a network of clinics.

For the next period, the private medical operator plans to

open an oncology center near the Sanador Hospital.

Sanador has recorded a turnover increase of 22% in 2016

compared to 2015. Sanador is owned by the Andronescu

family.

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Synevo

Synevo, part of Swedish Group Medicover, has a network

of 16 laboratories and 75 blood collection centers in

Romania.

The Synevo business model is based on laboratory

analyzes offered to private patients. Synevo has opened

11 blood collection centers in 2016.

Synevo Romania has recorded a y/y turnover increase of

16% in 2016.

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Gral Medical

Gral Medical has completed in April 2017 an investment

of EUR 5.5m in the radiotherapy department of its

OncoFort hospital.

For 2017, Gral Medical plans to open an oncology center

with day hospitalization and to increase the bed capacity

of the OncoFort hospital.

Gral Medical is controlled by a Romanian business person.

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Recent M&A in the Private Healthcare system in Romania (examples)

Romgermed has acquired in 2017 the Doctor Isreb Medical Center in Bucharest, coordinated

by the Syrian doctor Isreb Ahmad Nayel, launching an expansion operation based on the

acquisition of small and medium players in the Bucharest area. Romgermed has been set up in

2000 by Mr. Dorin Sam Schwartz and Mr. Filip Florin Schwartz.

The healthcare investor and provider of diagnostic imaging and cancer treatment services

Affidea Group has acquired Hiperdia in 2016 from SouthEast Europe Equity Fund II (managed

by US-based Bedminster Capital Management) and Harkstede Holding. Hiperdia is a main

provider of diagnostic imaging services in Romania.

The international healthcare services provider in the nephrology field Diaverum has taken over

International Healthcare Systems (IHS) in 2015. IHS is one of the biggest dialysis services

providers in Romania, operating a network of 15 kidney centres.

Regina Maria has acquired in the last two years Al-Medica Berlin Medical Center in Ploiesti, the

Clinic IXIA Medica in Bucharest, the Ponderas Academic Hospital in Bucharest, the Helios

Medical Center in Craiova and the Dr. Grigoras Medical Centers in Timisoara.

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Jackie BOJOR, Director

FRD Center Market Entry Services

Str. Orzari 5, Bl 46bis

Bucharest, Romania

www.frdcenter.ro

Tel: +4021 411 1460; Fax: +4021 411 1461

Skype: FRDCenter

e-mail: europa@frdcenter.ro

For tailored market research, B2B matchmaking with

local players in the sector, deal origination and M&A

assistance feel free to contact